Selling Goats & Chocolate On-line
Kenyanpundit has a post on Mama Mike’s expansion their product line and I guess they’ll now be selling goats on-line. Piggy backing on this post and in an attempt to broaden this discussion, I want to talk about the potential growth of ecommerce in Kenya ( I have to talk about it here since I’ve been banned from commenting on KP’s blog. Sigh).
At some level, I understand what Mama Mikes is doing (and feel free to correct me if I’m wrong). It appears that their primary customer base are the NRK’s (non-resident Kenyans) and that would make sense for an on-line company because these NRK’s have:
However, how long can one sustain this business model? I mean, I’m not going to pay those exorbitant prices. I’d much rather send money to someone in Kenya and let them find and purchase whatever goods they need at the “Kenyan (read: reduced) price. I mean, how long are these NRK’s going to be willing to pay exorbitant prices continuously for everyday, run of the mill goods? (emphasis on the word “continuous” ). Maybe, they’ll try it once to make someone special happy, but after they get the bill, they may say no, it’s really a waste of money and I’d be better off sending my relatives the cash.
Then my next question is whether it would be better off for a company like Mama Mikes to concentrate on the Kenyans in Kenya. So, instead of selling goods that other stores already sell, why not go something else, like offer to set-up a site that sells tickets on-line so people don’t have to stand in line to get into events. If I recall, that was one of the internets biggest successes before traditional sites like Amazon came around — i.e. selling tickets to events on-line (& tickets by the way are not bulky products that require storage, shipping or handling. Once you purchase them, you can just print it on-line and voila!).
I guess I don’t understand why anyone would want to deal with “driving” and delivering goats all over the country (or any other bulky good for that matter). That really has to be a pain in the neck.
Okay. I want to hear from the NRK’s. Are you guys regular, committed customers of these ecommerce sites?
Hey, I moderate comments but haven’t banned you…at least to the best of my knowledge….
Very good points you make, I’ve been urging Seg to focus on domestic as well for a while e.g. charging a bit of a premium to pay guys electricity bills rather than someone queuing at Stima house for hours.
E-commerce is not going to take off in Kenya until they sort out the broadband issues. Furthermore, how many people have PCs in Kenya?
However, people like Mama Mikes could position themselves for the future. It is inevitable that there will be highspeed connections and better PC market penetration in the next 10 years. They could then reap the benefits of having a recognisable brand.
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I also prefer to send money directly. It is a much easier proposition.
Mind you my Zimbabwean friends use a Zimbabwean version of Mama Mikes frequently to shop for their relas back in Zim. So, the model itself is not bad – it is only that it is not suitable to the economic conditions in Kenya at the moment.
In Kenya, I have been seeing a lot of advertisement campaign on TV, newspaper and bill boards for laptops. Now this ads are 10 times for than those of mobile phones. It reminds me of like 5 to 7 years ago when there where a lot of mobile phone ads for Nokia, samsung etc. Now I see alot of HP, Acer, DELL ads around.
The fact that the laptops ads are more than PC ads I guess they are being targeted for home owners. My guess in the next 3 years or so, the number of internet home owners across the country is going to shoot up sharply. I hear laying of fibers across the country is almost done, just awaiting to be linked up with the undersee fiber optic around june next year.
@KE, if you want to look at investment opportunities, don’t look at the way things are now, look and what is developing now to predict how it will be in the future. People may have laughed at those who where setting up BPOs in the only corner of the world that was not connected to the global fiber network, but your guess is as good as mine, they are going to re4ap big time.
Hey, Keio,
the future of the internet (in africa) is not on PCs, but on mobile phones.
Psyd off:
The future is in BPO/outsourcing that will take advantage of the cheap labor in Kenya and the young, English speaking population.
Mobile phones have been very useful in Africa, but unless you are a company like safaricom with millions of cash to spend on R&D, I don’t think that option is viable for a lot of people.
However, with outsourcing, if you can get the clients from America or Europe, you can get going with very little cash on hand. You don’t need millions.
Much of what we do at MamaMikes is driven by our desire to develop a world-class e-commerce service within an African context.
It has been exciting. And the future will only get better.
We enjoy moments like a recent order by a customer who used us in a very interesting way. Such moments are very rewarding: see our video about it on Mamamikes.com/tv
Thanks for the conversation!
Mamamikes:
For those who can’t watch on-line tv, can you please tell us how this customer “used you in a very interesting way”?
What do you mean by developing ecommerce within an African context? What exactly does this entail and is it different from running an e-commerce site anywhere else in the world?
The reason why Mamamikes is successful is because they provide a way out. Have you had a rela ask you for money for say school fees for your niece only to find that the school fees was not paid or paid half or something. What Mamamikes does is simply to allow people to help out where they intend to without having their hard earned cash disappearing. Either way sending flowers to your sister when she has just given birth along with a hamper for the new born says so much than money does.
cee:
Okay. You make a good point. That mamamikes is a buffer against familial corruption.
Cee,
You are absolutely spot on! I love MamaMikes because its convenient, hassle free and relevant i.e. you can purchase gifts etc for family members from familiar and favorite places that will especially be meaningful e.g. purchasing a scarf for my mom from her favorite boutique in Yaya Center without having to send a rela who doesn’t know who or where that boutique is or who can pocket the money themselves.
And I think it is great that you are expanding your vendor and service provider pool! I assume you guys are also preparing for the inevitable which is when many of these stores allow you to purchase their items online on their websites…..I know the big stores like Nakumatt etc do which eliminates the need for a middle man?
Anyway congratulations and I look forward to your next forays, and you’re absolutely right about e-commerce in the African context. African consumer habits are very different from Western ones, most wananchi will never join the credit card bandwagon because the concept is both unfamiliar and most will not use what little disposable income they have that way so getting a commerce platform that works similar to Mpesa where people can pay bills or purchase items using prepaid units of cash will be a goldmine.
Good luck!
One year ago to this day, Babawatoto came to existence at its inception, our
goal was to make Babawatoto a platform to provide a convenient mechanism for Kenyans living abroad to send goods and services to their friends, relatives and business partners back home. It is a privilege and a great joy for me to extend a vote of thanks to all those who have contributed in one way or the other to make babawatoto’s goal a success.
We look back and we humbly note that with your support over the past severalmonths,we’ve delivered of cakes, bouquets of flowers,Greeting cards, KCSE/KCSEexam cards,Cell phone Airtime, MPESA,Fuel Vouchers,Shopping vouchers and other gifts to recipients in and around Nairobi, Mombasa,Nakuru,kisumu, Thika, Eldoret and several other towns around the country.
This year should be memorable to all your families as you assist them even in
this time of the global economic recession. We appreciate your business and we will always work overtime to ensure that we meet your needs and demands as our valued customer.
HAVE A BLESSED NEW YEAR